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In his initial 2018-19 budget proposal this past January, Governor Brown unveiled plans to launch a new, fully online community college in fall 2019, named the California Online Community College. In response to concerns raised by legislators, community college representatives, and advocates, the Governor’s May Revision provided more details on the intent and structure of this college. In the enacted 2018-19 budget, state leaders elected to move forward with the online college, allocating $120 million ($100 million in one-time funding and $20 million in ongoing funding) for the creation of the college.

In an effort to shed light on key facets of the California Online Community College and its potential implications, this post explains the intent and structure of the college, discusses the labor market value of the credentials that the new online college will offer, and highlights key concerns and questions about this college.

Key details regarding the online college include the following:

Intent: The goal of the online college is to serve the estimated 2.5 million working Californians age 25 to 34 who have a high school diploma but lack a college degree, a group the Governor refers to as “stranded workers.” Providing these workers with certifications is intended to help them obtain the skills they need to succeed in the job market, which increasingly demands and rewards higher education.

Academic Offerings: The college will offer “short-term credentials,” described by the Community College Chancellor’s office as “short sequences of classes through which students can demonstrate mastery of skills and competencies that lead to a positive employment outcome, such as a wage gain or promotion.” These credentials will be stackable, meaning they can be used to progress toward a more advanced certification or degree. The college is required to develop three program pathways by July 1, 2021, with the first two announced as Medical Coding and Information Technology Support (IT Support). The online college will offer unique programs that are not offered at existing community colleges and can be started at any time, rather than following a traditional academic calendar with concrete semester schedules — restrictions that California’s existing community colleges must adhere to under institutional policy. Offering associate’s degrees will not be the focus of the online college, but the short-term credentials could be counted as credits toward an associate’s degree at a traditional community college.

Structure and Accreditation: The California Online Community College will be integrated into the existing California Community Colleges (CCC) system as its 115th college. It initially will be governed by the CCC’s Board of Governors until an independent body is established by the Chancellor’s Office. The online college is required to achieve accreditation candidacy in the third year of implementation and full accreditation by 2025. During the period that the college is still unaccredited, students will be restricted from receiving federal financial aid for classes taken through the online CCC.

Funding: The online college will be funded like the existing CCCs, through Proposition 98 General Funds. As noted above, the 2018-19 state budget allocates $100 million in one-time funding and $20 million in ongoing funding for this college.

Fee Structure: The final budget permits the college to develop its own experimental fee structure, with the caveat that fees not be higher than the $46 per-unit enrollment fee charged at traditional community colleges.

Will Short-Term Credentials Boost Workers’ Earnings?

The Chancellor’s Office states that the online college’s focus is “developing short-term credentials that have labor market value and can lead to wage gain.” But just how much labor market value do such credentials have?

Generally, more education is associated with increased earnings and economic well-being. Even obtaining a short-term credential or certification can help protect against poverty. The California Employment Development Department (EDD) publishes occupational employment projections for workers based on the entry-level education needed for particular jobs. Individuals obtaining the proposed short-term credentials offered by the online college would fall into the “postsecondary non-degree award” group of workers whose wage data are available. The EDD median annual wage estimates for jobs requiring a postsecondary non-degree award range from around $25,000 to over $100,000. The median annual wage for a career in medical coding, the first proposed pathway for the online college, is $45,781. (EDD refers to this occupation as “Medical Records and Health Information Technicians.”) Annual median wages for careers that could fall under the second pathway proposed for the online college, Information Technology Support, range from $60,341 for a “Computer User Support Specialist” to $73,216 for a “Computer Network Support Specialist.”

Recent studies also suggest that vocational certificates have substantial economic returns. Research from the Georgetown University Center on Education and the Workforce reveals that short-term credentials are associated with significantly higher earnings and that these labor market gains vary depending on the age of the student and the particular program of study. Specifically, the report finds the greatest income gains are among low-income students and younger students (age 29 and under) and for those who receive credentials in technical fields, such as computer and information services.

In addition, employment projections indicate that while job growth in California has been the strongest for holders of bachelor’s degrees, there is significant growth and future demand in occupations requiring short-term credentials. According to the EDD, employment in occupations listed in the Medical Coding and IT Support pathways is projected to grow by around 20% in the next ten years.

Is an Online College the Solution?

The demand for and economic returns from jobs requiring short-term credentials and certificates are affirmed by occupational employment projections, but is a new online college the solution? It depends who you ask.

Some legislators and key stakeholders (including the Legislative Analyst’s Office) have expressed skepticism about the need for a new online community college. In 2013, the CCC system created the Online Education Initiative, which allows students to take online courses across multiple colleges. Earlier this year, the California State University (CSU) collaborated with the CCC to launch an online course finder tool that provides CSU and CCC students with access to more than 10,000 online courses. Critics of the Governor’s online college suggest expanding these existing structures to accommodate the needs of stranded workers rather than creating a whole new college. The 2018-19 budget does incorporate some of this feedback, allocating $35 million in one-time funding to the Online Education Initiative for community college districts to develop online content. The enacted budget also requires the programs at the new online college to lead into degrees offered at existing community colleges.

Another concern regarding the new online college is that the intended target students may not be best served by online learning. One study by researchers at Stanford suggests that online courses tend to have poor student outcomes, especially for the least-prepared students. Research from the Community College Research Center at Columbia finds that community college students are less likely to complete and perform well in online courses. Many of the existing studies regarding online courses focus on traditional students, rather than on the slightly older stranded workers targeted in the Governor’s proposal, so it is not clear if older students would fare the same, better, or worse in online courses.

The Governor and CCC Chancellor maintain their enthusiasm for the new college, insisting that the current structure of the state’s community colleges does not and cannot serve the needs of stranded workers due to regulations that hold colleges to traditional schedules.

California Must Improve Skills for Workers, but the Path Forward Is Unclear

California’s economy is increasingly dependent on a highly educated workforce and, at the same time, is becoming less forgiving to those without the skills and credentials valued by employers. The scale of educational transformation that is needed to secure the state’s economic future is not supported by the current infrastructure outlined in the state’s higher education Master Plan. Industry certifications and short-term credentials have proven to be one pathway to the kinds of more-skilled occupations that are driving the 21st-century economy. Helping ensure that Californians, especially the state’s stranded workers, obtain these skills is important for their individual success as well as for our state’s economic future.

While this sentiment is widely shared among state leaders, the path forward — including the role of the new online community college — is littered with questions and concerns. The 2018-19 budget deal provides a general structure for the new online college and the state’s effort to help stranded workers, but still leaves many details to be worked out in the months and years ahead. This means policymakers still have a role to play in making key decisions about the online community college and the move to include online short-term certificates as part of the state’s broader public higher education goals.

— Amy Rose

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